Question:

Whethera County official mayserveas a memberof theboard of directorsof a bank which bank does not do business with theNewCastle County governmentand for which she is paid a flat fee for monthly meetingattendance?

Conclusion:

Yes,therequestermaycontinue herserviceon theboard of directorsof a bank which does not do business with theNewCastle County governmentand for which she is paid a flat feefor monthly meetingattendance,so long as theconflict of interestproceduresin theEthics Code areobservedatall times,including that she formally recusesherselfwhile servingon theboard of directorsfrom participation in all matterswhich comebeforetheCounty that involve that bank and all matterswhich comebeforethebank that involve County government.To theextentthat it comesto theattention of therequesterthat customersof thebank aredoing business with thebank in orderto performactions which requireCounty governmentapprovals orinvolvement,she must takereasonable steps to inform herselfof thesepotential conflicts in herserviceon theboard of directorsfor thebank,and viceversa, in orderto avoid possible unintentional cross-overof bank and County matters.

Facts:

The requesteris a recently-hiredCounty official and employee.Since 2000,therequestorhas servedas a memberof theboard of directorsof a bank. She is paid a flat feefor attendance atmonthly meetingsbut is not otherwisecompensated for herserviceon theboard.The bank atissue is headquarteredin Wilmington, Delaware,is a DelawareStateCharteredBankand an FDIC insured, Equal Housing Lender. Itis also subject to theregulation by theDelawareBanking Commissioner. The bank operatesone branch in NewCastle County and one branch in Sussex County.The bank has been providing banking servicessince 1996and holds itself out as a leaderin providing securedand unsecured Visa and MasterCardCredit Cards to people with little orno credithistory. The bank has advertisedthat its goal is to “continually develop,expand, and retain sound consumer and commercial relationships by delivering attractiveand competitive financial products and services,atan exceptional levelof quality that exceedsconsumer'sneeds and expectations.”Additionally, thebank advertisesa commitment to theDelawarecommunity by participating in promotions which benefit theDelaware Financial LiteracyProgram,Junior Achievement,United Way,theMinistry of Caring,Interfaith Community Housing of Delaware,and theOpportunity CenterIncorporated. Further,thebank participates in theCommunity ReinvestmentActwhich subjects thebank to heightened scrutiny by the FDIC with respectto whetherit provides continuing and affirmativeobligations to help meetthecredit needs of thelocal communities in which thebank is chartered.

The bank does not do business with theNewCastle County government.Itis not involved in any litigation with NewCastle County.And it does not haveany pending applications in theLand Use Departmentorany otherCounty department.

Business with which heorsheis associated meansany business in which theperson is a director,officer, owneroremployee;ora business in which a memberof theperson's immediate family is a director, officer,ownerorhas a financial interest.

Conflict orconflict of interestmeansconduct which is prohibited by Section 2.03.103.

County meansNewCastle County and including any County Department.

County official meansany person electedorappointed to any County office, board, commission orthe NewCastle County Council Audit Committeeprovided, however,that for purposes of Sections 2.03.103(B)(2), 2.03.103(C), and 2.03.104(C). "County official" does not include any memberof a board orcommission which operatessolely in an advisory capacity,and whose membersarenot compensated, otherthan reimbursementfor expenses.

Governmentalbody with which a County official orCounty employeeis orhas beenassociated meansthe governmentalbody within County governmentby which theCounty official oremployeeis orhas been employed orby which theCounty official oremployeeis orhas beenappointed orelectedand subdivisions and offices within that governmentalbody.

Recusal means,including but not limited to,withdrawing fromsponsorship, deliberation, vote,research, preparation, discussion, negotiation, contractformation, policy making,planning, decision making, and/or implementation of a matter.Italso includes a prohibition on conducting, in an official capacity, any privateorpublic discussion of a measureraising a conflict orimproper appearance. Assoon as a potential conflict orimproper appearancearisesoris recognized,an official oremployeemust end directorindirect participation, advice,input, direction, recommendation, ordiscussion, as well as refraining fromvote,if theperson is a not an electedofficial. Elected officials maychoose to avoid recusal and mayvoteif theyfollow thealternateprocess described in Subsection 2.03.103.A.2.

Regulated by NewCastle County meansthat an entity operating in NewCastle County as a business or nonprofit organization requiresapproval fromorregulation by NewCastle County in orderto lawfully conduct one ormorebusiness activities.

Code of Conduct Provisions

Certain portions of theNewCastle County Ethics Code arerelevantto this opinion, including the following:

Section2.03.101.- Purposeof Division.

A. Itis herebydeclaredthat public office is a public trust and that any effortto realizepersonal financial gains through public office otherthan compensation provided by law is a violation of that trust. Itis furtherdeclaredthat thepeople havea right to beassured that thefinancial interestsof holders of or nominees to orcandidates for public office do not conflict with thepublic trust. Becausepublic confidence in governmentcan best besustained by assuring thepeople of theimpartiality and honesty of public officials, this Division shall beliberally construed to promote completefinancial disclosure as specified in this Division. Furthermore,it is recognizedthat clearguidelines areneededin orderto guide public officials and employeesin their actions. Thus, this Division intends to define as clearlyas possible those areaswhich representconflict with thepublic trust.

B. Itis recognizedthat manypublic officials arecitizen-officials who bring to their public offices the knowledgeand concerns of ordinary citizens and taxpayers.Theyshould not bediscouraged from maintaining their contacts with their community through their occupations and professions. Thus, in orderto fostermaximum compliance with its terms,this Division shall beadministered in a mannerthat emphasizes guidance to public officials and public employeesregardingtheethical standards established by this Division.

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Section2.03.103.- Prohibitionsrelatingtoconflictsof interest.

A. Restrictions on exerciseof official authority.

1. NoCounty employeeorofficial knowingly orwillfully shall use theauthority of his orheroffice or employmentorany confidential information receivedthrough his orherholding County office or employmentfor thepersonal orprivatebenefit of himself orherself,a memberof his orherimmediate family ora business with which heorshe is associated. This prohibition does not include an action having a deminimis economic impact orwhich affectsto thesamedegreea class consisting of the generalpublic ora subclass consisting of an industry, occupation orothergroup which includes the County official oremployee,a memberof his orherimmediate family ora business with which heorshe ora memberof his orherimmediate family is associated. Therewill bea rebuttable presumption of a knowing orwillful violation of this section if theaction benefits theCounty official oremployee,his or herspouse, orhis orherdependent children (whetherby blood orby law).

2. In any casewherea person has a legal and/or statutory responsibility with respectto action or non-action on any matterwheretheperson has a personal orprivateinterestand thereis no provision for thedelegation of such responsibility to another person,theperson mayexerciseresponsibility with respectto such matter,provided that promptly afterbecoming awareof such conflict of interest,the person files a writtenstatementwith theCommission fully disclosing thepersonal orprivateinterest and explaining whyit is not possible to delegateresponsibility for thematterto another person. If the matteris one in which thelegal and/or statutory responsibility requirestheperson to voteupon the issue, thewrittenstatementfiled with theCommission shall bereadinto thepublic recordprior to the timetheperson's voteis cast. Anyperson choosing to abstain fromvoting on an issue whereorshe has a conflict shall statethereasons for his orherconflict on therecord;an abstaining voterneednot file thewrittenstatementwith theCommission required when acting on, ratherthan abstaining from,an issue involving a conflict.

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Section2.03.104.- Codeof conduct.

A. NoCounty employeeorCounty official shall engagein conduct which, while not constituting a violation of Subsection 2.03.103.A.1., undermines thepublic confidence in theimpartiality of a governmentalbody with which theCounty employeeorCounty official is orhas beenassociated by creatingan appearancethat thedecisions oractions of theCounty employee,County official or governmentalbody areinfluenced by factors otherthan themerits.

B. NoCounty employeeorCounty official shall acquire a financial interestin any privateenterprise which such employeeorofficial has reason to believemaybedirectly involved in a decision to bemade by such official oremployeein an official capacity on behalf of theCounty.

C. AnyCounty employeeorCounty official who has a financial interestin any privateenterprisewhich is subject to theregulatoryjurisdiction of, ordoes business with, any County Departmentshall file with the County Human ResourcesOffice a writtenstatementfully disclosing thesame.Such disclosure shall be confidential and theCounty Human ResourcesOffice shall not releasesuch disclosed information other than to theCommission and to theDepartmenthead of an employee,exceptas maybenecessaryfor theenforcementof this Division. The filing of such disclosure statementshall bea condition of commencing and continuing employmentorappointed status with theCounty.

D. NoCounty employeeorCounty official shall use such public office to secureunwarranted privileges, privateadvancementorgain.

E. NoCounty employeeorCounty official shall engagein any activity beyond thescope of such public position which might reasonably beexpectedto requireorinduce such County employeeorCounty official to disclose confidential information acquired by such employeeorofficial by reason of such public position.

F. NoCounty employeeorCounty official shall, beyond thescope of such public position, disclose confidential information gained by reason of such public position nor shall such employeeorofficial otherwiseuse such information for personal gain orbenefit.

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Case Law and Commission Precedent

The NewCastle County Ethics Code prohibits conduct on thepartof County officials or employeeswhich eithercreatestheappearanceof impropriety evenwhereno directconflict of interest is present.Specifically, conduct which createsan appearanceof impropriety is prohibited by Section 2.03.104(A)of theNewCastle County Code.To determineif an appearanceof impropriety exists,the Delawarecourts havestatedthat “[t]hetestis… if theconduct would createin reasonable minds, with knowledgeof all relevantfacts,a perception that an official’s ability to carryout [his or]herduties with integrity,impartiality and competenceis impaired.”Hanson v. DelawareStatePublic IntegrityCom’n, 2012WL3860732,at*16(Del.Super. 2012),aff’d,69A.3d 370(Del.Supr. 2013);and “[t]hetestfor appearanceof impropriety is whethertheconduct would createin reasonable minds, with knowledgeof all therelevantcircumstances that a reasonable inquiry would disclose, a perception that the[official’s] ability to carryout [theofficial’s] responsibilities with integrity,impartiality and competenceis impaired.”In reWilliams, 701A.2d 825,832(Del.Super. 1997).The courts haveadvised the Commission to look atthetotality of thefacts presented,and this Commission has historically applied this standard when reviewingtheconduct of County officials and employees.

In AdvisoryOpinion 15-09,a County employeeaskedtheEthics Commission whethershe could join theboard of a nonprofit organization if she revealedthepotential areasof improper appearanceto both thenonprofit and theappropriate County authority and recusedherselffromany activities which maycausetheappearanceof conflict, including policy making,promotion, orotheractivities concerning thenonprofit’s relationship with theCounty. The Commission decided in theaffirmative,but reminded theemployeethat,in orderto assurecompliance with theEthics Code, recusal required morethan abstaining on mattersput to a vote.The Ethics Code definition of recusal also meansthat theemployee maynot engagein any County discussion orcircumstancethat involves thenonprofit board, and the employeemaynot engagein any nonprofit board discussion orcircumstancethat involves theCounty. In addition, theemployeemust makeit clearin herparticipation and activities with thenonprofit organization that she is not acting orspeaking on behalf of NewCastle County, and she maynot appear beforeNewCastle County officials oremployeeson behalf of thenonprofit organization.

In AdvisoryOpinion 15-03,theCommission wasaskedwhetheran appointed official could serve as a memberof a nonprofit board which has occasionally receivedfederalfunds that areadministered by theofficial’s department. In concluding that theofficial mayjoin theboard of thenonprofit, the Commission required theofficial to revealpotential areasof improper appearanceto both thenonprofit and theappropriate County authority and to recusehim orherselffromany activities which maycause theappearanceof conflict, including policy making,promotion, orotheractivities concerning the nonprofit’s relationship with theCounty.

In AdvisoryOpinion 10-06,a County employeerequestedguidance as to whetherheorshe may serveon a board of directorsfor a nonprofit organization which provided servicesfor citizens ata County parkadministered by his orherdepartment. Due to thefactthat thefunction of theboard of the nonprofit wasto overseeactivity that wasconducted under extensiveand continuous regulation by the employee’sCounty department,theCommission concluded that theemployeemaynot assume a seat on theboard without violating theNewCastle County Code provision against representationof a private entity beforehis orherdepartment. Further,theCommission reasonedthat assumption by the employee of a leadership role in thenonprofit organization extensivelyregulatedby his orher departmentwould createan appearanceof partiality in decisions madeby that departmentconcerning thenonprofit organization.

In AdvisoryOpinion 09-05,a County official on a nonprofit board wanted to participate in the formation orexecution of a contractbetweenthenonprofit and a company that wasacting as an agent for theCounty. The Commission ruled that theofficial must recusehim orherselffromall of theboard’s discussion, negotiations, votes,orcontractformation with theCounty orits agents.

In AdvisoryOpinion 05-24,an electedofficial askedwhetherhecould becomea memberof a nonprofit board which receivesfederalcommunity development funds administered by theCounty and a small County grant. Quite similarly to theconclusion in AdvisoryOpinion 15-03,mentioned above,this Commission held that theelectedofficial mayjoin theboard of thenonprofit if heorshe revealsthe potential areasof conflict to both theprivateentity and theappropriate County authority and requests that both theentity and theCounty permithim to recusehim orherselffromtheactivities which cause theappearanceof conflict, including policy making,promotion, orotheractivities concerning the nonprofit’s relationship with theCounty.

Analysis:

The NewCastle County Ethics Code recognizesthat County official and employeesaremembers of communities and haveconcerns and activities beyond their lives as County employees,as discussed in Section 2.03.101.B:

Itis recognizedthat manypublic officials arecitizen-officials who bring to their public offices theknowledgeand concerns of ordinary citizens and taxpayers.Theyshould not bediscouraged frommaintaining their contacts with their community through their occupations and professions. Thus, in orderto fostermaximum compliance with its terms,this Division shall beadministered in a mannerthat emphasizes guidance to public officials and public employeesregardingtheethical standards established by this Division.

In Section 2.03.103.Aof theCode, governmentconduct on thepartof County employeesor officials for personal orprivatefinancial benefit is prohibited. Further,Section 2.03.104.A.1 prohibits the creation of an impression in thereasonable mind of a memberof thepublic that an official or employee’sofficial action is affectedby personal interestswhich impairs his orhercompetence, integrityand honesty,orthat thedepartmentin which heserveswill look as though it is showing partiality in a givenmatter.

PriorCommission decisions areespecially instructive on theissues raised by this requestfor an advisory opinion. The requestoris a County official with managementresponsibilities which extend throughout County government.The purposes advertisedby thebank atissue herearepositive banking activities, but thepotential for actual conflict ortheappearanceof a conflict exists.That is theissue which must becarefully observedby therequestorin orderto preventany realconflict of public impression of a conflict. To avoid any violation of theEthics Code, therequestormust follow the dictates and restrictions outlined in AdvisoryOpinions 15-09,15-03,10-06,09-05,and 05-24(referenced aboveand available on theEthics Commission website),a well as Ethics Code Section 2.03.103.B,which requiresherto recusefromany issues regardingthebank which comebeforetheCounty and to recuse fromany issues regardingtheCounty which comebeforetheemployeeas a memberof theboard of the bank.

Finding:

The requestormaycontinue herserviceon theboard of directorsof thebank if theemployee revealsthepotential areasof improper appearanceto both thebank and theappropriate County authority and recusesfromany activities which maycausetheappearanceof conflict, including policy making,promotion, orotheractivities concerning thebank’s potential relationship with theCounty. The requestoremployeeis reminded,in orderto assurecompliance with theEthics Code, that recusal requiresmorethan abstaining on mattersput to a vote.The Ethics Code definition of recusal also means that theemployeemaynot engagein any County discussion orcircumstancethat involves thebank,and theemployeemaynot engagein any bank discussion orcircumstancethat involves theCounty. In addition, theemployeemust makeit clearin herparticipation and activities with thebank that she is not acting orspeaking on behalf of NewCastle County, and she maynot appearbeforeNewCastle County officials oremployeeson behalf of thebank.